August 19, 2012
The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino and research analyst Austin Smith discuss topics around the investing world.
Today, Isaac makes the case for General Electric as the most attractive natural gas bet on the Dow Jones Industrial Average. With 44% of the natural gas turbine market, GE has consistently outperformed its closest competitor, Siemens. GE obviously has advantages over pure-play natural gas investments such as Chesapeake Energy, whose all-in-bet on natural gas is basically a binary outcome proposition in the near term. Likewise, Isaac believes GE can prosper so long as natural gas prices remain relatively attractive to coal when it comes to the electrical generation on the power grid.
Although GE makes up only 1.22% of the Dow's weighting, the stock has been a broad indicator of economic performance for more than half of a century. Investors should weigh the stability of the company with the growth opportunities and consider the conglomerate as a long-term investment in a natural gas future.
For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's --infrastructure leader--. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.